The United States is considering toughened sanctions against Iran over an alleged plot to kill the Saudi ambassador and possibly many more people in the U.S. capital. President Barack Obama called it a "dangerous escalation" by the Iranian government.
Obama talked about the alleged plot in a joint news conference with the South Korean president.
"This is a - not just a dangerous escalation, this is part of a pattern of dangerous and reckless behavior by the Iranian government," said the president.
U.S. Attorney General Eric Holder said earlier this week that members of Iran's Revolutionary Guard Corps were involved in a conspiracy to assassinate Saudi Arabia's ambassador in Washington.
"We believe that even if at the highest levels there was not detailed operational knowledge, there has to be accountability with respect to anybody in the Iranian government engaging in this kind of activity," Obama said Thursday.
The president said the United States would continue to apply the toughest sanctions possible against Iran, and not take any options off the table.
In the Senate, Treasury Undersecretary David Cohen said the administration is considering new sanctions targeting the Central Bank of Iran [CBI].
"Further U.S. action against the CBI, if it attained multilateral support, could further isolate the CBI, with a potentially powerful impact on Iran," said Cohen.
A bipartisan group of senators recently sent a letter to the president accusing the Central Bank in Tehran of working to circumvent existing sanctions.
One lawmaker said the Revolutionary Guards should be designated a terrorist group.
Democratic Senator Robert Menendez called for loopholes to be closed that allow some Iranian oil to be sold in the United States.
"It's clear to me that if this is one of the greatest global concerns that we face, it is clear that we must find a way to target this lifeblood of the Iranian regime," said Menendez.
State Department spokeswoman Victoria Nuland said the United States and Iran had a rare direct meeting over the allegations. Officials said it was held at the United Nations.
In Vienna, Saudi Foreign Minister Prince Saud Al-Faisal said his country is considering what he called a "measured response."
"They think by murder and mayhem they will influence the actions of this country. We will not bow to such pressures," said Al-Faisal.
Still, many analysts say the alleged plot doesn't match Iran's methods in the past. Iran's foreign ministry has dismissed it as a "ridiculous farce."